After six years of selling health and life insurance plans, Boise, Idaho, based agent Patricia Somers decided she was sick and tired of the insurance business.
She says she had had enough of the ever-questionable future of the insurance business, the shrinking commissions and the lack of interest in benefits plans from consumers.
“People were not interested in their future and saving with life insurance,” Somers explains. “People are so unsure of the future, unsure of how things work. Young people thought it would cost less for health insurance; it was so hard to convince them otherwise with averaging young and old premiums. Besides that, Obamacare was so confusing for agents, let alone clients.”
So last fall she gave up that career and started a travel business, Global Odyssey Trips.
It’s a career that’s bringing her a lot more happiness than her former life as an agent, she says.
“Here I am today, enjoying what I love to do, making people happy,” she says. “I specialize in group travel, be it family vacations, group-escorted travel, golf or fishing vacations, wedding destinations or honeymoons around the globe.”
Somers’ story is not an uncommon one.
According to a survey that turned up the alarm in the insurance industry, a whopping half of brokers say they’re considering leaving the business in its entirety.
Aflac’s WorkForces survey — released over the summer — found that 45 percent of brokers say they’re considering exiting the health insurance business altogether, with the majority (51 percent) saying they are only slightly or not at all confident about the future of their firm and their industry.
Though brokers’ concerns over their future have been widely reported, albeit anecdotally, Aflac’s survey of more than 300 brokers offered a clearer picture of how many are thinking about leaving the business.
Unsurprisingly, the unrest is rooted in a number of wide-ranging changes in health care — notably the Patient Protection and Affordable Care Act.
“I’ve seen brokers who jumped out of the industry when health care reform first started. They went on to get involved in the financial market or whatever else, but they left insurance and benefits behind, feeling that their career was doomed,” says Gene Ramsay, a benefits consultant in Birmingham, Ala., and president of the Birmingham Association of Health Underwriters.
“They had all their business tied up in health insurance and were living pretty,” he says, “and they felt that the government involvement would flush it all away.”
But Aflac’s figures puzzled others in the industry.
“It surprises me,” says David Smith, vice president of health and welfare benefits at North Carolina-based Ebenconcepts, said of the results. “Most of the professionals I know are not planning on leaving the business. I’m sure there are people who do nothing but the occasional health insurance policy who may now decide to get out of the business.”
Robin Benton, president at BCL Systems Inc. in Chicago, said though she thinks some certainly will leave, she doesn’t think the industry is doomed.
“I think some agents and brokers will leave the business, but I think the survey may have shortchanged some of them,” she says. “I’ve always found these folks are great at thinking outside the box.”
Obamacare has long been a sensitive subject for insurance professionals. The easy translation: Many felt their job security was threatened.
The law’s medical loss ratio requirement threatens commissions, and industry experts say it’s been taking its toll.
“Previously, up to health reform, the agent would work with a decision maker, whether the owner of the business or vice president of human resources, some c-suite individual who would make a decision on actually purchasing health insurance,” Daniel Steenerson, president of Disability Insurance Services, in San Diego, told BenefitsPro earlier this month.
“The exchanges are going to mandate now that not only is the agent going to have to deal with that gatekeeper, but … that they are going to have to sit down with each and every plan participant. Their income is dropping by 30 percent and they’re working harder, or longer, or exerting more energy in order to make that 70 percent of what they were making before,” Steenerson said.
More recently, brokers have been dubious over PPACA’s navigator program, saying it’s one last administrative jab to their profession’s worth. The administration has said that navigators do not have to be licensed agents or brokers and may not be paid by insurance companies. Republicans have slammed the navigator program, arguing that brokers and agents are trained professionals who have the experience and requirements to guide consumers in their health plan options.
The problem with Aflac’s survey suggestion, industry insiders say, is that it comes at a time when workers and employers say they want more help from brokers and benefits experts as they try to make sense of health care changes — especially as PPACA goes into effect.
According to Aflac’s report, the majority of employees (78 percent) at least somewhat agree they would be more informed about their health insurance choices if they worked with an insurance consultant during benefits enrollment; more than one-third (35 percent) of those questioned strongly or completely agree with that statement.
Employers also said they need guidance with a number of benefits trends, including the increasing movement from HMO and PPO plans to consumer-driven options, as well as implementing wellness programs.
Those are positive things, experts say.
Other numbers speak well for brokers: For example, recent research from the University of Minnesota found that brokers are associated with more and cheaper health coverage.
NAHU Vice President of Congressional Affairs John Greene admits that while some are considering leaving the industry, “many in our agent/broker community see opportunity.”
“Employer and consumers continue to need the advice that only an agent can provide,” Greene says.
Benton agrees, saying she “sincerely hopes” brokers aren’t leaving the industry, as they’re needed more than ever with PPACA policies being put into effect.
“We are working with our brokers to drive individuals to those who have registered to sell on the marketplace,” she says. “Unlike navigators, certified application counselors and healthcare.gov customer service folks, the agent can give the individual the most options and can help ensure they get the best possible coverage. Not to mention, they will be there to answer questions after the sale and to help should the individual need to make changes in the future.”
“I can’t imagine that the navigator will tell someone who does not get a premium tax credit that they might be able to find coverage outside the marketplace that will better fit their needs or might even be slightly cheaper,” Benton continues. “Rather, they will encourage them to still enroll in a marketplace plan.”
Some brokers and agents are becoming more innovative in order to look for other ways to increase — or maintain their income.
Some are shifting their focus to Medicare Advantage and other insurance products, such as disability, life, critical illness and vision insurance. Voluntary product sales — which are increasingly popular among employers — are helping brokers fill the gap.
But it’s still hard work — and more than some brokers want to handle.
Brokers leaving may not be the worst thing for the business, Ramsay says. Some of the pessimism needed to be washed away.
“Those who were not in this industry for the right reason packed up their toys and went on their way. I’m proud of them for leaving, because if they stayed it would literally have been a drain on everyone,” he says. “Now their clients will get the attention and service they need from professionals who truly care more about the client than the paycheck. Like the cliché says, ‘It separates the men from the boys.’”
Other industry insiders say what they refer to as the “crisis of confidence among brokers” is a trend that can be turned around if brokers realize the increasing opportunities coming their way thanks to the PPACA.
Aflac executives said employee education and communication about benefits are two especially key areas of opportunity for brokers.
Michael Zuna, Aflac’s executive vice president and chief marketing officer, says that despite the alarming figures about broker confidence, their expertise is increasingly in demand.
“Education and engagement will be crucial to helping employers attract and retain employees and keep them productive and satisfied on the job,” he said. “What’s more, the smartest agents and brokers will seize upon health care reform as an opportunity to even further demonstrate their value and encourage employers to satisfy workers’ expectations and needs when it comes to benefits education.”